The Downturn in the
New England Economy: What Lies Behind It?

After a long period of vigorous growth--a period in
which New England grew faster than the rest of the United
States--employment in New England leveled off in 1989.
This slowdown represents both a cyclical adjustment
and a disturbing erosion in New England’s competitive
position.

To help clarify the causes of the downturn and the
implications for the region’s future development,
this article develops a framework for analyzing regional
economies, applies that framework to New England and
other regions of interest, and examines New England’s
share of national markets in key industries. The author
finds that New England’s strong overall growth
since 1984 was based on an unsustainable boom in construction,
which masked problems in the region’s economic
base going back at least five years.